Filing bankruptcy is of course credit suicide. It should only be considered only as a last resort.

Not only will it make it difficult to get a loan or credit card in the near future, but employers are now checking credit reports before they hire. This economy makes keeping your credit as pristine as possible even more important than ever before.

Dreaming of a low interest loan?

A bad credit score reduces your chances of getting low interest loan. I’ve had clients come to me and tell me that their bankruptcy lawyer told them they could start rebuilding their credit right after filing. This is true, but it seems that they thought they would file bankruptcy then go get a new 9% interest rate loan. They don’t understand there will now be a rebuilding period where they will have to be willing to accept higher interest rates, lower credit amounts, and even structured or secured loans. And thats the good part, they will also have to be aware that some lenders will decline their loan right away when they see a bankruptcy on their credit report.

A bankruptcy will stay on your credit report for 7 years. In my days of business lending, when i had a client with a bankruptcy that was less than 3 years old I knew I was going to have to structure the deal with additional collateral, or automatic payments would be required from their business checking account or they may need additional collateral for approval. If the bankruptcy was less than 2 years old I knew it just wasn’t going to get approved without all of the above AND a strong co-signer.

But you don’t need to wait 7 years to start rebuilding your credit report. To get started on the road to recovery, here are a few tips you should follow.

Tips on How to Rebuild your Credit:

1. Is it time for a credit repair company?

   Firstly, don’t run off to hire a credit repair company. You CAN NOTlegally remove your bankruptcy from your credit report and any company that claims they can is probably a scam.

2. Obtain your credit report.

   Make sure you contact all 3 credit bureaus. You will be surprised at how different each report can be. Its your job to review them, and make sure the information being reported about you is correct. You can order your free annual credit report from Annualcreditreport.com. But you are only entitled to one free report a year. You should also look into a credit monitoring service

3. Find Errors.

   If there are any errors on your report you need to write the credit bureau immediately, explain whats wrong and why its wrong. If you have proof of repayment or settlement include it with your letter. Always send ALLcorrespondence via certified mail with return receipt requested

4. Create a budget.

   Bankruptcy is kind of like a clean slate. Most of your debts can be discharged depending on the type of bankruptcy you file. Not all types of debt that can be removed with bankruptcy. For example tax debts and student loans can not be included in a bankruptcy.Regardless, bankruptcy can be the fresh start that you are looking for and need. Take advantage of this opportunity and start off on the right foot. Creating a budget and sticking to it will help you not only rebuild your credit but you will also find that the removal of all the debt has also removed a lot of the stress in your life! &n

Avoid getting into more debt

Bankruptcy isn’t the opportunity for you to go out and rack up a lot of new debt. Learn from this experience, only finance necessary items. Learn the difference between NEED and WANT Don’t get into debt because you love $300 shoes! My mom has a great old saying : Cut your coat according to your size. It just means don’t let outside pressures make you purchase expensive items. YOU DO NOT NEED TO KEEP UP WITH THE KARDASHIANS!